Greenwald: The Death of Manufacturing; Deep Value Investing in Juniors

Prof. Greenwald on competitive advantage, the shift to services and why profit margins are so high and may remain so.

Most recent interview of Prof. Greenwald

You should think through Prof. Greenwald’s thoughts. Regarding investing, it is the art of the specific, so don’t let the the above macro talk affect your investing too much. I do agree that service companies develop competitive advantage through either product economices of scale or regional economies of scale.

Ajit Jain: 32_KeyInfluencers_AjitJain


Bhandari-High Risk High Reward in Junior Mining Companies

Game on or con on: Fraud in Junior Mining Equities:  or having fun with your money. The key is the lack of quality deposits!

Let me know what YOU think.


7 responses to “Greenwald: The Death of Manufacturing; Deep Value Investing in Juniors

  1. Question, why should I care what Bruce Greenwald has to say about investing? As far as I can see, he hasn’t made any serious money from it.

  2. I used to follow Greenwald like a recipe. Now I use his approach more as my “opening gambit” for analysis. I write down what I think he’d write down for the qualitative and quantitative first, and then start to think about where it might be wrong, because indeed he’s often been wrong. I don’t know his batting average, but I’m grateful to him (and John C. for posting) for at least giving me a good baseline from which to think.

  3. In my view, reading Greenwald to try to be a great investor is like reading a fat man’s diet book to try to lose weight. The biggest difference between Graham and Greenwald is that Graham has the track record to give his words credibility.

  4. I tend to agree with Lumilog. The question isn’t if Greenwald is a good investor. He may be too “smart” and stubborn for that. He isn’t interested in investing but he wants to be the SMARTEST guy in the room.

    I roared with laughter at Daniel’s comment, “…like reading a fat man’s diet book to lose weight. SAVAGE! Now I know someone with a darker sense of humour than me.

    The point might be to look at Prof Greenwald’s ideas independently and without much prejudice to see if YOU can use the ideas.

    Look, I sat in the back of Greenwald’s class six years ago and listened to his lecture on shorting Amazon at $130 in 2010 (now $750?). Amazon had no barriers to entry like customer captivity since people could click on a mouse to another supplier. I really loved his simplification of analyzing competitive advantage unlike the complex Porter’s Five Forces. BUT Greenwald got me thinking of how HE and others could be blinded. Granted, I am a bit of an iconoclast so I lean the other way, but don’t be impressed with “Prof” Greenwald. He is as flawed as all of us.

    Why–if it is so easy to switch–did I use Amazon’s Prime and why did so many others too? To make a long story short, I realized that Amzn DOES have huge customer captivity based on what I observed. Also, they were expensing what I believed was investment in their moat. I bought some shares which more than paid for my train fare, time and lunches to audit Greenwald’s class.

    Blind followers of Pabrai would scream in chat-rooms that he was an idiot to invest in Alcide Batteries–of course, after they followed him off a cliff. I waited for Pabria’s three-year rule to sell Alcide which didn’t have the “Brand” name that he thought, to buy at 1/2 of tangible book value. That worked out too because I bought a so/so business at a distressed price not a so/so business at a premium.

    Don’t prejudge, but focus independently on the ideas and what YOU can learn and use. I asked a drunk on the street on cold Feb. day where to find the Chicago Board of Trade since I was lost my first time to Chicago. He rose from under his pile of newspapers to point in both directions down and up the street then collapsed back to the pavement. I learned not to ask the wrong person.

    I disagree with alot of Prof Greenwald’s teachings. It is very difficult IN PRACTICE to use replacement value unless you really have expert domain knowledge. If you don’t, then Greenblatt would suggest moving on. But his teachings on competitive advantage such as REGIONAL economies of scale has helped me enormously.

  5. JC, perhaps your first point is his achilles heel since the bear case on just about anything always sounds the smartest.

  6. “[H]e wants to be the SMARTEST guy in the room.”

    Then why is he a Keynesian??? lol

    All kidding aside, I’m sure he has some good ideas somewhere, I guess my point is that my time is limited, and I don’t think learning from an “armchair investor” is the best use of it.

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